September 19, 2020
Saugata Roy speaks on The Companies (Amendment) Bill, 2020
Sir, all I want to say is that we are meeting in difficult times when the economy has gone into a tailspin. I am just reading the figures: Growth down by 23.9 per cent, though one Honourable Member said it would get better, fiscal deficit to touch 7.8 per cent of GDP, 30.5 per cent fall in revenue in the April-June quarter, 34 per cent fall in GST collection, 13.1 per cent rise in expenditure. The economy is in a mess.
Now, the situation with this Bill is like, when a person has cancer you give him a placebo, a palliative. This Companies (Amendment) Bill, coming as it is during the time of COVID-19, is like a placebo or a palliative. It is not going to change anything. Both the two Members who spoke earlier have described the history behind the Bill. I was here in 2013, when the new Bill was passed, I spoke on the Bill at that time, but in retrospect, I do feel that I was a bit too harsh then. It did introduce a very good concept, of corporate social responsibility or CSR, for which the UPA-II Government should be given credit. But otherwise, that Bill came on the back of the Satyam Scam and other scams in the country, and so I became a little harsh.
In company laws, one has to make a balance between strictness and ease of business. I think that this Bill has made some important changes—it has removed or decriminalised more than half of the existing compoundable offences under the Companies Law as well as lowered the monetary penalties for violations by start-ups amid efforts to further improve the ease of doing business in the country. I think basically we cannot quarrel with that.
I also say that a new chapter on producer companies has been introduced and it seeks to decriminalise minor procedural and technical defaults which do not involve fraud or injury to the public interest. This will reduce the burden on the NCLT (National Companies Law Tribunal). The NCLT is already burdened with the cases under the IBC (Insolvency and Bankruptcy Code). So that is a good idea. Lastly, under this Bill, companies having CSR obligation of less than Rs 50 lakh will not be required to form a CSR committee.
I am trying to encourage the government. But as I said, the future of the economy of the country will not depend on companies. The need was a law and so the Parliament has given the government a law, but the latter must discipline itself so that there are no more scams, so that shareholders are not given frauds like it happened in the case of Satyam. So, though I have given amendments, I shall not move my amendments. Let this Bill be passed. If it gives some relief to some people then it will be good.